Michigan’s Emergency Manager Law: Good for banks, not so good for people

Michigan’s Emergency Manager law is a big part of my dissertation, so I haven’t written about it much here. But after wading through the overwhelming media support for Proposition 1, which will affirm the Emergency Manager law passed by Republicans in 2011, a rare piece on the underlying issues caught my eye:

Those who like the emergency manager approach — like the Mackinac Center — don’t like the prospect of bankruptcy for a simple reason: Municipal bankruptcy under federal law requires real sacrifices from bondholders and bankers — not just residents and workers.

Unlike emergency managers, bankruptcy courts have the power to bring creditors to the table. That can lessen cuts in services like police and fire departments, and public transportation. But compromise and sacrifice by creditors is something the emergency manager law was explicitly designed to prevent.

Jordan is from Flint, which has had a particularly volatile experience with the law, and he is part of the lawsuit that led to the law being suspended, paving the way for Proposal 1. I’ll have more to say once the voting (and perhaps my dissertation) is done, but I wanted to highlight his article now.

via Guest view of Paul Jordan: Why you should vote ‘No’ on Proposal 1 | MLive.com.